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AI Ads, Performance Creative, and the Ready Set Journey | John Gargiulo
30 Plays1 year ago
The Efficient Spend Podcast helps start-ups turn media spend into revenue. Learn how the world's top marketers are managing their media mix to drive growth!
About the Host: Paul is a paid marketing leader with 7+ years of experience optimizing marketing spend at venture-backed startups. He's driven over $100 million in revenue through paid media and is passionate about helping startups deploy marketing dollars to drive growth.
About the Guest: John is the CEO and co-founder of Ready Set, a performance creative agency serving brands like Coinbase, Hims and Hers, and Smile Direct Club. With 15 years of creative strategy experience and a previous stint as a global product marketing lead for Airbnb, he brings a wealth of experience to understanding creative production at scale.
VISIT OUR WEBSITE: https://www.efficientspend.com/
CONNECT WITH PAUL: https://www.linkedin.com/in/paulkovalski/
CONNECT WITH JOHN: https://www.linkedin.com/in/john-gargiulo/
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Transcript
Introduction to 'Efficient Spend' Podcast
00:00:00
Speaker
Welcome to the Efficient Spend podcast where we help marketers turn media spend into revenue. My guest today is John Gorjulo. John, thank you for being here. Yeah, happy to be here.
00:00:10
Speaker
I'm really excited to chat with you. And just for full transparency, you are the founder and CEO of Ready Set. I am an active Ready Set client through a company that I work for full time. And it's been a great experience. And so I have a lot of firsthand experience into Ready Set and what you do. But before we get into that and really into the weeds, would love if you could give the audience just a high level overview of
00:00:39
Speaker
of who you are and what you do.
John Gorjulo's Career Journey
00:00:42
Speaker
Yeah, so I'm John. Originally, I was a brand guy. So I went to Miami at school to be a creative, did the copywriting program there, and worked in the New York agency life for a few years, doing TV, radio and print. And then fast forward to 2011, came out here to
00:01:02
Speaker
Southern Silicon Valley from New York and joined Airbnb in 2016, ended up leading parts of marketing there. And in about 2018, 19.
00:01:16
Speaker
I started seeing this huge gap between like brand world that I came from and performance pivot tables and spreadsheets. And if it doesn't pay back in 30 days, why would I do it world? And there's like totally different people in both literally different buildings at Airbnb. Um, and I have this kind of a fortunate field division where I worked with both, uh, leaders of each. And I thought, man, I get both sides, but I, I feel that's rare. And I feel like they don't really get each other.
Founding of Ready Set
00:01:44
Speaker
And as Facebook and TikTok, all these things started becoming a really big part of people's marketing mix, and the rise of direct consumer, fintech, et cetera, just saw this gap in the middle. So teamed up with Sam Makalu, my co-founder, who came out of Nanigans, the biggest Facebook marketing partner and platform in their day.
00:01:59
Speaker
And he's the performance side of the house on the creative production. Let's scale this thing aside. He's an amazing, also COO. And we started Ready Set in October 2019. Now we're over 200 people, fully bootstrapped, work with awesome brands like you guys, DoorDash, him's and hers and others. During your time at Airbnb, you were working as a global product marketing lead, right? Yes.
00:02:29
Speaker
I definitely want to get into the Ready Set experience in detail, but obviously Airbnb is a brand that a lot of folks know. What were you responsible for there? And yeah, what was your kind of role at Airbnb? Yeah, changed a bunch. So when I joined, there was this newish thing called Airbnb for Work with this crazy idea in 2016 that maybe when you go to Tokyo or New York,
00:02:52
Speaker
instead of staying at the big Midtown Hotel, you stay at a really cool apartment in the Lower East Side. That was very foreign to a lot of people. Even now, I mean, we figured out quickly it doesn't make sense for a one night stay. But just being the first marketing hire, first B2B marketing hire at Airbnb, telling that story was really super fun. And then ended up leading the product marketing team generally there.
00:03:18
Speaker
It's funny, product marketing, one of the first things my boss or CMO asked me to do is, hey, can you go figure out what the hell is this product marketing thing? He's a genius brand guy, incredible human being. And I found out it means something different everywhere. But you know, ostensibly product marketing is, my friend put this really well, is
00:03:37
Speaker
The product manager stands back to back with the product marketer. The product manager is looking at the engineers and stakeholders and what we can do internally. The product marketing manager is looking out at the audience. Who is this really for? Who does this matter to? Let me talk to them and get to know them, and they work together. That's how it's supposed to work, anyway. Yeah. And was there anything kind of unique about the team structure at Airbnb, just being at such a, you know,
00:04:07
Speaker
fast growing company, anything around what their management philosophy was like, team structure was like, that you took away from being at such a top tier kind of organization.
Marketing Challenges and Insights at Airbnb
00:04:18
Speaker
Oh man, so many things. I think the biggest thing about being at a hyper growth place like that is
00:04:26
Speaker
I got to remember the exact phrasing because I'm going to butcher it. But there was a tweet a few years ago. It said, what it's actually like, what it's actually like inside a hyper growth startup. This was during the go-go days, like 2021, this tweet. It must have been from Lord of the Rings or something. It's a big tree and there's a big sliver in it. And there's just fire and brimstone like going on in there. It's just total chaos. And I wouldn't say it was total chaos. Brilliant people there, great culture.
00:04:50
Speaker
smart people, but just things you wouldn't believe. I guess my favorite example that sort of crystallizes this, we had a huge party in LA, flew in the entire company to launch Airbnb Experiences in 2017. I hadn't been there very long. There was a, I heard the, hey, after the Brian's big speech, we're all going up to the Hollywood Hills, we're ready to whole house. Anyways, I'm standing, it's very surreal, I'm standing in this pool next to this guy who started seven months before me,
00:05:18
Speaker
And just chatting, mid-level guy. And he goes, yeah, I just came back from Cupertino before this trip. I said, oh, what? He said, oh, well, I guess Apple had been trying to reach out to the company for months because they wanted us to update our app profile or whatever. And we don't have anybody who does app store stuff. So they're just like, hey, can you just go down there and talk to them? He's like, there were like 12 people there.
00:05:42
Speaker
I thought, are you kidding? You know, he's a good friend of mine. I'm like, there's nobody here because I'd come from the world before Airbnb, where whether you're a fintech app or a mobile game, your Apple relationship with that rep, like that's 80% of the company. So there were so many examples like that, Paul. They're just like, wow, this place is growing so fast to such product market fit. But if people knew all of the things we're not doing, they'd be amazed.
00:06:07
Speaker
Sure. Um, and, and you kind of started off the conversation with explaining a little bit about your, uh, the, the reasons behind starting ready set and why that mattered and kind of bringing, uh, bridging the, uh, the gap between Brandon performance. Was any of that happening at Airbnb was your experience at Airbnb, um, in any way, part of the reason why you started ready set or. Absolutely. Absolutely. It's funny you ask because I just, um,
00:06:37
Speaker
heard from a friend who's the head of FBA, financial planning and analysis. He was the head of it for marketing back then. And this poor guy is brilliant. He had to bought back and forth between the performance building I mentioned and that 200 person team and the nine figures they were spending and look at all the math, you know, how much should we invest here and how much is coming back and how are we attributing? They tried forever to get a multi-touch model working that never worked. And then the brand team and our goals were literally like,
00:07:07
Speaker
Well, we think we can get 50% payback in three years. It's just so hard to measure brand, right? Especially then. And I remember he was in the sort of our den of this marketing leadership team meeting. And he was saying, look, these guys are making back all their money and then some like really fast. What are you guys doing? And I was the guy banging the table for multiple of these meetings saying, hey, but we're building the brand. You plural are more likely to click on a
00:07:35
Speaker
Airbnb ad than an Acme shoes ad. Like that is really helping those other guys. And by the way, we're all the same company. Um, and they did a couple tests to try to show that, but it was just really hard to connect. So I feel a bit bad for the higher parts of the funnel because, and I saw this there, as I just said, like on the ground, because there's a lot that ought to be attributed to them. That's just always going to be too fuzzy to figure out.
00:08:00
Speaker
But there's no question in my mind that payback, the CAC, all of that for all of the hundreds of millions we were spending on performance advertising would not have been the same if there wasn't this really trustworthy Airbnb brand.
00:08:12
Speaker
And so is that, you know, does that kind of create this ready set philosophy of really high quality video ads? Cause you're still very performance focused, right? Absolutely informed that that's what informed it is I saw that gap between the two, literally the two buildings. And then I started, as I talked to people to see if there was a product here, it was happening at so many companies. I cannot tell you how many conversations I've had.
00:08:41
Speaker
especially folks like VPs and CMOs that are looking at their marketing department. And they're like, sometimes it's worse. They're like, I can't get my performance folks and my brand people to have a thoughtful, productive conversation. I think that's improving a lot. But yes, we saw this big gap. And you're absolutely right. Our feeling was, look, brand matters for all the reasons I said.
00:09:03
Speaker
You don't ruin the Airbnb brand with crappy ads, which is a little bit of what was happening. However, performance matters, too. And, you know, the point of marketing is to make more money than you spend over time. And we ought to do something that doesn't ruin a brand. And there were some other agencies out there that were almost famous for sort of putting out ruining stuff. But that also performs and has a point. It isn't just for its own sake. You don't forget, I came from the brand world where
00:09:29
Speaker
It was completely subjective. When I was in advertising, it was like the Mad Men days. I like to say if the CMO's wife or husband thought a commercial we just spent a million dollars on was funny, then you got a retainer for another year. That's crazy. So it just fascinates me, the gulf between that world, which still exists, it has a place, I think it'll get a lot smaller, and the hardcore performance world with
00:09:56
Speaker
sophisticated Facebook marketers that are like, I don't even know those guys and they're out to lunch. Right. Yeah. And I think I've talked to a lot of folks about this, the over-reliance on strong channels with attributed data, putting all of your dollars there, and then to a certain extent,
00:10:19
Speaker
spend cannibalization happening, audience cannibalization happening, reaching the same folks over and over.
Adapting Marketing Strategies in Budget Constraints
00:10:26
Speaker
And so the solution is media mix modeling. The solution is more of a full funnel philosophy on things. The space that you play in with Ready Set and your client base from what I can tell is like mostly disruptor brands that are trying to figure this out. Is that a correct characterization? Would you say that you play mostly in this kind of like
00:10:48
Speaker
disruptor, D2C consumer startup kind of world. Okay. Absolutely. Yeah. It's hyper growth. Although 2023 here, it's more like hold on to growth companies in many cases. Companies just like you and I are picturing right now, just like some of the logos I mentioned.
00:11:07
Speaker
Yeah, and why don't we talk about that for a second? Holding on to growth, right? Because when I joined CELF in June 2020, we experienced hyper growth, and I think a lot of folks in the space were, and now there's a lot of competition, there's a lot of disruption, there's less budget to play with that type of thing. Throughout your client base, how are you seeing folks respond to that?
00:11:32
Speaker
Oh, I think it really varies depending on the space the client is in, depending on what they were doing before. Um, so, you know, him's and hers is crushing it. Their stock is way up. Um, but they've got a really great suite of products, really incredible execution. Um, and just a product that, you know, it's a subscription product that people don't stop subscribing to. Uh, by the same token, we have other clients that have, um,
00:11:56
Speaker
Like, unfortunately, they were never a client, but I just saw a molecule filed for Chapter 11, right? There's people that have a thing to sell, especially something like molecule that's a high price point, can be difficult with paid social, that we're spending seven figures a month on paid social, none of it ever profitable. And then they're waking up to this, it's like,
00:12:15
Speaker
Warren Buffett says, it's not till the tide goes out, you see who's wearing a bathing suit. You know, they're caught with no bathing suit. And then everybody's crouched down a little bit. I mean, I don't know almost anybody who's pushed the throttle forward on spending, certainly not for revenue's sake, in the last year and a half. It's mostly been pulling back with a few key exceptions. And then on the fintech side, I was talking to a,
00:12:41
Speaker
Also never been a client, but almost been a couple of times. And they were, we had a party at MAU, two MAUs ago, and they were spending 3 million a month.
00:12:50
Speaker
And then the next MAU, he said, hey, we're frozen. We're figuring it out. We stopped spending. We're going to go back to it. I caught up with him a couple months after that. He said, we're at $0 still indefinitely. We're existentially wondering if this channel works for us. And then we have other FinTech clients that are still chugging along and scaling. So it really varies depending on the space in the company.
00:13:12
Speaker
Right. It sounds like in some circumstances, and I know that we're taking this approach. It's a philosophy of diversification, not only in your channel mix, but in your product mix and your pricing and things like that. And if you're over relying on one product and you think that's just going to work forever, it's probably not the case. That's absolutely right. Yeah. It's even more true in B2B, but it is true in B2C.
00:13:34
Speaker
It's like way better to sell new products to the same people. Like that's what hymns and hers has done really well, right? They have this ED drug that's really popular and they're like, Hey, are you having problems losing your hair? You know, Rogaine style foam is off patent, right? We can help you with that as well. Those companies have done really well.
00:13:51
Speaker
Yeah, it's even kind of what you're doing too, launching new companies and launching new products, right? Which we'll get into in a bit. I want to talk a little bit about kind of like our relationship from a high level. One of the things that I really wanted to discuss, I was super impressed by the onboarding process at Ready Set.
00:14:14
Speaker
This podcast is very focused on media mix optimization, how to be as efficient as possible with your marketing spend, right? And production cost is one lever and one layer of that, one part of that component. The onboarding process, I feel very kind of like the Abraham Lincoln quote, right? If you wanna spend most of your time kind of sharpening the ax,
00:14:41
Speaker
How did you think through this onboarding process and, you know,
00:14:47
Speaker
with this end goal of we have this really good client relationship, we understand the product really well, and we can go out and produce great content for it.
Client Onboarding and Creative Testing at Ready Set
00:14:55
Speaker
Yeah, I'm really glad you asked. I'm laughing because it was not always so great. One of our five core values, and if I attribute this success already said to anything, it's our core values, which are very much us, very contrarian. You asked earlier about what I learned from Airbnb. It was absolutely that core values that are really genuine matter, and happy to talk about that.
00:15:16
Speaker
one of them is hashtag get better and this came out of when it was just the two of us a client would be upset about something or whoa I thought this but it's that and and we'd say okay let's fix it and then you know he'd slack me hashtag get better you know and and and that comes from if we can just keep improving we can always you know outlast the competition in terms of the onboarding process it's gone through a lot of iteration
00:15:39
Speaker
I think the principles behind it, as far as Sam and I are concerned, are first, listening. I think a lot of agencies just bomb in and say, you know, this is the playbook and they plop it down on the table and they just go and the brand is like, hey, where are you going? That's not us at all. And by the way, we tried that last year. And so I think just be humble and listening. A lot of our clients are very sophisticated and know their stuff and like yourself and tried things. So that's step one.
00:16:02
Speaker
And then being organized, one thing we invest in, I was going to say overinvesting, but I don't think it's overinvesting, is we have an incredible operations team. We have incredible project management team. We have a shipping and receiving team for products. Those are things that not everybody does. They'll often just
00:16:18
Speaker
have a poor creative strategist two years out of school trying to do all of it. And that's when you hear these horror stories about, we left that agency after three weeks because it was a terrible onboarding experience. And then lastly, I think understanding not only the company, but the customer. Who is the person that we're talking to? We're about to make these ads. This is a major engagement. A lot is on the line. The company's trying to grow. If we don't understand as deeply as possible, as quickly as possible,
00:16:44
Speaker
who is the persona or multiple personas that this brand is going towards and what attracts them. If we just try to slap on a bunch of, well, this type of hook works for our air purifier client for a FinTech, I think that's the wrong approach. So it's taken a lot of iterations, but I think we've gotten to a place that sort of balanced all those things. Right. And throughout this, your kind of client mix,
00:17:13
Speaker
scaling the production over time. I wonder how you think about that. And I guess more from a creative testing perspective, something that we've done is we've iterated a lot on our roadmap, how we think about testing different themes, different products, and kind of a nice mix.
00:17:38
Speaker
When you talk to a startup or a new client and you think about scaling creative testing, do you have any philosophy or kind of like framework you deploy there? Yeah, we do have a framework. It's funny in terms of a philosophy, we do have one, but I find that the different religions among different growth leaders are fascinatingly divergent. Like we have a
00:18:02
Speaker
Uh, um, we have a meal delivery kit company. You definitely know. And I remember on the first call, the VP of growth, uh, and they've been very successful said, I really don't like to try more than eight new things a month. I'm spending the seven figures, but like it's eight things. We have a custom hair care client, big DTC company, and they were proudly telling us how they tried 541 things last month.
00:18:26
Speaker
Both people are really smart. Their brands are respected. They've both done well. So I don't feel, as much as I've seen across so many clients, I don't really feel it's my place to tell either one they're wrong. I think it depends on the company. Some people are super into iterations and changing out the hooks. Some people are super into completely net new concepts. I do think, I will give a point of view here, you plural can overdo the net new thing.
00:18:51
Speaker
I find, and I understand this, we have clients, and this has happened more than a few times, that are like, awesome. We're getting high-performing ads. Great. That one's doing well. This one's taking up a huge amount of our spend. Now it's been a couple months. We've been iterating on those, leaning into those messages, leaning into that persona.
00:19:09
Speaker
I'm being cynical here. I want to bring something new to the all hands. Can we try a deep pass over here or over there? And yeah, we can. And sometimes deep passes connect. And maybe we'll knock this one that's working off its perch. Because it just feels odd to have the same thing working. And we've all had that one ad that inexplicably goes and goes and goes.
00:19:29
Speaker
But I find it's sort of a rational but also definitely irrational urge to like, let's do something new. So in general, I think if there's a contrarian hot take here, it's that iterations are kind of unsexy. Hitting the same part of the field over and over again doesn't feel very exciting over a long period of time. We do find that's where a rich source of performance can come from.
00:19:52
Speaker
Yeah, I try to take a kind of stance of maybe 80% iteration 20% net new.
00:20:03
Speaker
not only in creative testing, but channel testing, media mix optimization more broadly, like looking for those incremental wins. When it comes down to what you're actually iterating on, that's where it gets interesting. If you have a champion ad, how do you dissect what component of this makes it a champion ad? Where do we wanna iterate and then what?
00:20:30
Speaker
Yeah, and I have something on that too. I think that's exactly right. Typically, because we've tested millions of things, typically it's the message that is the thing that's working. Typically, it's not the fact that it's someone squishing a ball of clay. Typically, it's what they're learning from it. We've got a whole bunch of frameworks. One of my favorites and one of the ones that works the most often is we call useful information delivered uniquely. It's when you find yourself watching that ad and you're learning a lot about
00:20:58
Speaker
this thing or something about the space, typically that's what works. The other thing that works a lot is simply an offer, right? Like, oh, the first time we did that 40% off the FCM ad, it's just crushed it. And of course that's got a time limit to it. But, you know, as I've said for four years, if two ads are going up against each other, a really awesome ad and a really okay ad that says 30% off, it's really hard to beat that second one.
00:21:24
Speaker
Right. Where does quality come in there though? Because to your point, I do think messaging is often the thing that leads to the conversion. But I feel like there's other elements of your cup that need to be filled up.
00:21:44
Speaker
And it's also kind of dependent on what the competition is saying and the quality of their ads as well. Sometimes, I think years ago you would say it's all about UGC and we saw success with, you know, kind of grainy testimonial ads that said something that were very unique. I'm not sure they would work as well today due to quality issues. So, yeah. Well, and the quality issues, even if it does work, like it can bring down the brand.
00:22:13
Speaker
Again, like I don't even try to pitch Airbnb because I don't think their brand is so sort of highfalutin and pixel perfect and designy that the kind of stuff we do, however high quality it is for UGC world, I think would potentially diminish the brand. I mean, we could do it, but I also just know them and they have the money and would rather spend it on that beautiful kind of a look and feel. I remember actually our CMO saying I was proposing doing some mid funnel education ads. I actually looked up our PM on
00:22:43
Speaker
a little sidetrack here, it was fun, on customer service, like all the message boards inside Airbnb.com, people were asking questions. And I asked them for a breakdown of what are the most asked things. And far and away, one of them at the time was, why do you need my phone number? I'm trying to sign up for Airbnb. Why do you need my phone number? And there were actually some really good reasons why we needed it. So I just took the top five of those, and I wanted to put out a bunch of ads on social about, hey, breaking down those obstacles. And he pounded the table. He said, no.
00:23:11
Speaker
The goal is not to like, you know, explain this, explain that, right? Nike, Apple, you don't see them doing that either. So he made a good point. The goal is to make the brand so desirable, so beautiful and incredible, you just want to be a part of it, that you just ignore that stuff. So that's a whole other level. I think what you're talking about is, yeah, I know that grainy, gross, even stuff that can really bring down a brand that's just trying to be
00:23:35
Speaker
something you can trust. I equate brand often with trust. And I agree with you. I think that asterisk for me is, does it look like an ad? And that's a really hard line to straddle because the moment it starts looking too polished, then we turn off and we're like, okay, this is another ad.
00:23:53
Speaker
Um, so it's gotta be high quality. I, you know, I was thinking about that word as you said it, I think of quality as authenticity. Even if it is a kind of a grainy thing, if it's like, I really believe this is a real person who really had this problem, really use this app. And I had that same problem. This person seems really genuine and compelling. That's very hard, by the way. We've all seen movies with actors, paid millions who are not crossing that bar. Um, that's quality to me, especially.
00:24:20
Speaker
Sure. Let me ask about that because there's elements of, as you can be a little bit more on the emotional side, and then you can be a little bit more data-driven for B2B brands, for fintechs, for brands that have kind of a technical product.
Balancing Story-Driven and Feature-Driven Ads
00:24:41
Speaker
How do you think about the divergence between those two, right?
00:24:45
Speaker
having a customer with a pain point and a challenge, we're solving that problem and want to tell a story about that in an asset versus we have these features and these bullet points. And we want to try to get those in there because we think those will work too.
00:25:02
Speaker
Well, you just said it. I think if you can couch those features and those things in the storytelling, in the personal stories. So we classify it into three ways to look at an ad. It's personal, it's a personal pitch, or it's a pitch. You don't want the second two. So a pitch would be, hey, we're so-and-so, look at our features, look at our thing, look at our app. And we see tons of those. It's very tempting. It's probably obvious to us and everyone on this podcast, well, no one does that.
00:25:31
Speaker
If you, plural, look at your own ads, there's probably a lot of pitches in there. And then there's the personal pitch, where it's like there's a half, you know, sort of attempt to be personal, but it's a pitch. Often you see the word you in this, like, hey guys, you've got to try this app. I use it, it's great, bye-bye, but you can do this, you can do that. It feels like they're trying to be personal, but they're basically pitching.
00:25:54
Speaker
Personal is where the gold is and personal is you don't even think you're watching an ad Someone is just using a lot of I my statements which were really big on it ready set and they're saying like I Could not get a car loan to save my life. I got rejected five times. Check out this piece of paper I was told this like can you believe they said that about me? And then you know, they're they're at their car. I don't even need a nice car, but I'm leaning in I'm learning about this person. I'm watching the story and
00:26:20
Speaker
And then maybe at the end, they mentioned offhandedly that they used whatever app to find the best loans. And they've solved their problem. That's what you're going for. And you can fold in some of those things. I didn't have to pay any interest. It was amazing. The other guys only wanted interest. So I think that that is where you get that in, is not a pitch, not a personal pitch, but the personal. And you can weave in those things without pitching them.
00:26:47
Speaker
Yeah. How do you respond then to channel best practices that can maybe make that storytelling a little bit harder? To give you an example, YouTube pre-roll, you want to get your brand in the first couple seconds, right? And sometimes, like TikTok will say, don't make ads, make TikToks, right?
00:27:12
Speaker
It's a funny thing because you know that the majority of the viewership on the ad is maybe only getting four seconds in, five seconds in. So do you want to try to just get your name in there or are you confident in kind of being a little bit patient and telling that story a little bit longer?
00:27:30
Speaker
It depends. I hate to say it depends, but it depends on the aim, right? Because it's true. 99% of people are not going to engage with a click on your ad. And so, well, at least all those 99%, which might be millions of people, saw our logo, registered it, maybe, right? And then that fits a brand goal.
00:27:47
Speaker
that's aided awareness, right? In your case, self, do you recognize this? Yes, that number goes up if you take that approach. At the same time, we've done a lot of tests on this, showing a logo is almost nothing says add more than a logo in the bottom right corner, right? So it depends on the aim. Right. If you had to quantify across all of Ready Set clients, how many assets your team has produced, what do you think that number would be?
00:28:17
Speaker
All time? Yeah. I mean, I can tell you this. We have quietly amassed the world's largest library of vertical video UGC style clips.
00:28:33
Speaker
We have something with all of our clients that says, hey, anything that's about you shows your logo, shows your product, talks about your product. You own that in perpetuity, which is what anyone cares about. The thing with the woman flopping down on the couch and glancing at her phone from an ad that didn't work in 2019, you know, reverts to us eventually, you know, years later. We have just crossed 300,000 just of those clips, because I was wondering if say tens of thousands or hundreds of thousands.
00:28:59
Speaker
So I would say in the high tens of thousands of ads, it'd actually be really funny and fun to put all of them together in one folder. You know, in AI, you could probably like read all of the captions on all of them and learn from them, you know? What are you looking to do with those assets eventually?
00:29:16
Speaker
Yeah, well, that's a good segue into, do you want to go to AI, the AI future? I guess before we go into the AI future, I want to know across those tens of thousands of ads, do you have any favorites? Do you have any that you remember? I'm sure that you don't touch everything, right?
00:29:36
Speaker
Oh, tons of favorites. Or even like anything internal. I mean, do you have a, I wonder like, does your team have kind of a meeting where you show, Hey, like this is a really good ad from this brand or that brand, you know, whatever. All right. I'm going to say, I'm going to say this one in my peril because I think there may be a competitor of yours, but we didn't have for Bridget.
00:29:52
Speaker
That, I mean, absolutely has creamed it. Major seven figures on this one asset. CEO loves it. We love it. And what was cool about it, when I talked about pitch, personal pitch and personal, it is like beyond personal. Genius creative strategist on our team did this. And it's very TikTok-y, though it killed it on Facebook as well. And he's walking into another room.
00:30:14
Speaker
And he says hey watch this I'm gonna I'm gonna ask my girlfriend to borrow money And you just see like it's going through a hallway of like an apartment in these village or something He says hey, babe. Hey, it's on her center laptop You just feel like you're in the apartment with them like you're watching a tick-tock basically and he says can I borrow you know $200 she's like no
00:30:33
Speaker
Um, why? And he's like, nevermind. I'll just go ask Bridget. And then you hear her go, Bridget, who's, who the app is? Bridget is bleeped out. It says this thing. He's like, no, don't worry, babe. It's this thing. It's like an app. But she's like, well, you're gonna have to pay tons of interest. Like you better not do that app. She's like, no, there's no interest. So they're just having a conversation. And it's super native, Paul. It's like super native. There's no logo. There's no anything. There's no captions. Um, and people just watched it and were like, I want to know what that app is. So,
00:31:00
Speaker
I love that example just because it's so not the kind of advertising, Mad Men style that I learned in ad school. Yeah. We're about to attest kind of something similar, a proposal gone bad. We just actually reshot this really beautiful scene. The guy's about to bed down on one knee.
00:31:27
Speaker
Hold up. What's your credit score? There you go. Which I think, to your point, it's that same thing of, OK, we're probably not, in your case, really fun play on words with Bridget. That's super cool. We might not get self in that first couple of seconds, but people want to watch and want to listen and see the rest of that story.
00:31:47
Speaker
Yeah, absolutely. I love that idea. And one of my, when I was in ad school, I did learn something that's applicable here, which is we were learning how to write long copy for anyone who remembers like magazine ads or whatever, there'd be that headline and then there'd be a few paragraphs at the bottom. And
00:32:02
Speaker
What I learned was what is the goal of your first sentence? The goal of your first sentence is to get people to read your second sentence. What is the goal of your second sentence? The goal of your second sentence is to get people to read the third sentence. And that's all it is. So it doesn't have to be in the first sentence. You know what I mean? You just have to make something watchable and interesting. I think that's where so many advertisers fall down. They're just like, well, I'm an advertiser. I'm doing ads. I need to put, like you said, all my features and I'll put a bunch of bullet points.
00:32:28
Speaker
that I've done my job. Look, boss, I made ads and then they don't work and they wonder why. But what you just described is a much better approach. Right. Um, I love that. Cool. So, uh, yeah, you have hundreds of thousands of clips now and, and, uh, what the hell are you doing with all that?
AI's Role in Video Creative Production
00:32:44
Speaker
Yeah. So believe it or not, I did not, we did not foresee AI hitting as it does. Um, and it's been an incredible tailwind to what I'm about to describe.
00:32:54
Speaker
But our vision is that everything you and I have talked about when it comes to video creative in particular can and will be productized. Somebody is going to do it. I'll explain what I mean. And we'd like to be the ones to do it for better or worse in the world. And what I mean is today, if you want that Bridget ad, if you want
00:33:13
Speaker
You know, I'll flip the script or problem solution style framework of UGC. That's 38 seconds where they're showing the product and walking through, blah, blah, blah, voiceover driven. You need to hire an agency. You need to work with influencers. There's a lot of cost involved. There's a lot of time involved. And you got to get it right. Expertise. We believe that all of these ads are really
00:33:36
Speaker
component parts that are put together. My co-founder came up with a great metaphor. It's like there's a kitchen, there's a pantry, and that's where all the ingredients are. That's where the 300,000 clips are kept. That's where voiceovers, et cetera, all the captions, all the things, emojis you can possibly put on a screen. And when you watch it, just watch. It's all just ingredients.
00:33:55
Speaker
And then the rub is, how do you take those ingredients and put them together into a dish that when you send it out to the floor, people actually eat it. Right. And today we do that manually. We don't even look in the pantry. We say, no, no, no, we're going to go to the farm. We're going to get the ingredients. We think this is going to work. And then maybe they like it. Maybe they don't. I think in the future, and I don't think it's that far away,
00:34:19
Speaker
AI will do all of this. So in order for AI to do its work, it needs context. It needs the recipes, at least some guidance on recipes that have worked, and we have that as well. And then it needs the ingredients, and nobody else has that. So you see an AI startup a week saying they're doing something with paid social, whatever. First, if you scratch the surface, they're almost all unusable, and I scratch the surface of every one of them. But they're all missing the footage.
00:34:45
Speaker
They don't have that. So lastly, we do these three, we call them 360. This is not even out yet, but it will be. We do a lot of what we call these 360 shoots. So incremental to all that footage. We get an actor in our 10,000 square foot LA studio outside of it, et cetera. And we shoot hundreds and hundreds of things of them doing things over two days. And then we have them saying hundreds of things.
00:35:09
Speaker
And it turns out, and I encourage anyone listening when you watch the next 10 ads on Instagram or TikTok, it's mostly people doing and saying similar things. And you've got to fill it in with voiceover over B-roll, often a product, of them describing your product. So I'll give you a simplistic example.
00:35:28
Speaker
Let's say we have a young woman in her nice apartment in front of her marble countertop and there's a whip pan to her and she says, you guys have to, I don't like the you. I can't believe how much this changed the way I look at skincare. And now you see clips of a product, you see clips of her putting a white cream on her face, you see clips of her out on a jog, great B-rolling clips that are all in the pantry.
00:35:56
Speaker
And you hear her continue to talk all about, you know, whatever the brand, Neutrogena's new skincare line, but all the things she's saying, oh, under that B roll, she never said, it's all AI voice cloning, which has gotten to an A plus level, you is indistinguishable. The script was written by AI based on what are all the ads that have succeeded before, what framework are we using, et cetera. And then the clips are pulled with AI. It even writes the script poll, and we've done this now internally,
00:36:26
Speaker
based on what it knows we have. Client can upload all their stuff. And so it's pulling those clips. And the hardest part we're finding so far, engineering-wise, we've got over 15 engineers working on this full-time for two years now. We've invested a lot in this, is where to make the cuts. We've had some breakthroughs there. They have to make the cuts like a real editor. And then if there's emojis or captions of what she's saying, et cetera, you put those on and you have an ad.
00:36:51
Speaker
Can we do this right now? No. Just the latest one I saw that was like a super MVP that was completely AI made for hymns internally. None of us would put out into the world, but it's not that far off.
00:37:05
Speaker
So I hope that you can visualize what I'm describing, but essentially two years from now, if not sooner, you'll be able to log in to a platform, ours hopefully, see an ocean of already baked ads. And you can filter them. I want unboxing. I want one that shows an offer. And in the long run, we want you to even be able to talk to them and say, yeah, I like that one, but more about Black Friday, right? And it's done. And it's democratized for everybody.
00:37:33
Speaker
In terms of the data inputs that you're using, to what extent are you actually getting data from the ad networks to say, this is good, do more of this? Or is it more, I see your competitive advantage of you're building this kind of like asset library, but yeah, what are the other data points that are inputs into this machine? I think that's,
00:38:00
Speaker
At first, just being able to make an ad, I keep telling our team, I don't care if it's horrible, but just like calling you up, which I will one day and say, Paul, please check this out. And there's 183 ads or 183,000 for self and you're scrubbing through them. And I think of it, I hate to use this word, like stock video in the sense that you don't click on one sunset when you're looking for a sunset and say, yeah, you write an email to Shutterstock saying, can you make it let more read? You just skip over that one and do the one that you like, right? So it's okay to have bad ones.
00:38:30
Speaker
So I'm just trying to get to a place where you can see a viable UGC style ad, eventually connected TV ads, we can get to that if you want, that you will look at as a sophisticated performance marketer and go, that thing's not just as good a chance of working as this other thing that whomever's spending weeks and lots of money on.
00:38:50
Speaker
That's step one. I think what you're keying in on is what my co-founder keys in on, which is the data modes that can be involved. Learning over time, right? Making sure competitors can only catch up to where we were, what is working, what's performing, and building that whole loop. And it's been interesting. Eric Super, and I think Adam Lavalow have published on this recently.
00:39:12
Speaker
Eric kind of painted a vision of the future where creative is just part of it. Like smartly, and some companies have already done this with images and swapping in a different picture or something, but imagine with video, the production, the ideation, what we're testing, did it work? Did it not, you know, you're just getting a notification the next day of, you know, the types of creative that's working and you can go up to the next level of whatever's important to work on three years from now.
00:39:40
Speaker
I wonder if the Googles and Facebooks of the world might try to do this as well. And I don't actually know if they own those assets. Like if you upload an ad to the ad library, would they be able to take that? Hell no, definitely not. If they took a Reebok,
00:39:56
Speaker
I don't care if it's a woman flopping down at a couch with a phone and using a Nike ad, they'd be in big trouble. And that is what we're betting on. Look, Nanigans got usurped by Facebook. Facebook threw them hundreds of clients, made them almost go public, and then tapped them on the shoulder literally in a meeting at Facebook and said, guys, we love you. It's been a great five years. We're going to build all this stuff as well.
00:40:17
Speaker
And so, you know, that can happen. You do not want to be dependent on a platform that could build the same features. What I am very confident in is that none of these platforms want to go open a studio and shoot what I call pick up a camera. It doesn't scale. Google tried to do it with YouTube. They even just tried to have a network of videographers you could meet. I happen to be friendly with the head of YouTube for advertisers. She said, I just didn't scale. They got rid of it. So as long as we're the ones with the footage and it's the right footage,
00:40:46
Speaker
right? It's not a stock library. And I was surprised, Paul, like, if you go to Shutterstock and just try to look for, like, I just want a 9x16 of a 20-something guy looking at his phone and smiling in a non-cheesy way, you know, by the ocean. Good luck. It's all terrible. It's all very shiny. So we often say, like, that the asset library is really our mode.
00:41:08
Speaker
And I guess an obvious question there is then, will you continue to get raw footage and where is there still a place for a $100,000 highly produced TV asset or will that shift over time?
The Future of High-Budget Ads and AI Applications
00:41:28
Speaker
And I guess to another extent there, something I'm thinking about, I haven't done a lot of
00:41:36
Speaker
high production, celebrity, kind of like Super Bowl style ads, is that space also going to be innovated? To me, it feels like components will, but yeah, will we still be spending a quarter of a million dollars on a Super Bowl ad? More cynicalness for me, I think the answer is yes, there will always be some of that because of
00:42:01
Speaker
ego, it's really fun to be like, Hey, look, I'm a CMO. I want to go hang out with Taylor Swift and make an ad for $5 million. Literally going to Thanksgiving and saying, I made it to add with Taylor Swift for $5 million. No cousin is going to go, what was the return on ad spend over the, you know, there's going to go, woo hoo, you're awesome. Um, so I've seen that world on the brand side. It's still mostly the same. They had a huge scare in 2020, 2021.
00:42:25
Speaker
when Facebook just looked invincible. And it's like, why would you spend on anything else? Even Airbnb squinted their brand spend, threw it all over to performance. They are famously now sloshed back the other way.
00:42:37
Speaker
I think there will always be Super Bowl ads. Right now, Paul, it's a huge part of advertising spend in the world, those big brandy things. And I think that that will get smaller. They've gotten a bit of a reprieve because, you know, the narrative of two years ago, they're like, this is all a waste of money. We're over here on Facebook and Google, definitely making it back. Aren't we awesome? That was really hard for that world to face.
00:43:02
Speaker
Now with ATT and everything, it's like, oh, whoops, we don't really know anymore exactly what's happening. So let's go back to media mix modeling and these Kantar giant textbooks full of hieroglyphics. And TV becomes more attributable. But I do think that'll shrink a lot. And then back to my crazy vision for, we call it turning any vision into video, even a 16 by 9 eventually,
00:43:32
Speaker
Levitra ad with an older couple walking on the beach, sitting in a bathtub, right? There's no reason those couldn't be ingredients in a pantry. And that whoever the, you know, you become, I think a lot of our sophisticated performance marketer friends will become the next CMOs of these companies come in and go, Yeah, I don't want to spend $3 million they want at Ogilvy Mather to shoot an old couple again. No, let me just check out these 183 things. Oh, there's one that's exactly our messaging.
00:43:58
Speaker
Hey, can you have it be a little bit tweaked there? The bathtub's a little weird. You know, switch to a different couple. Done. Hi, Res. 16.9. Send it over to the CTV guys. Um, and you know, like Peter Thiel says, it's got to be 10 X better, not 10% better. I think we're talking about a hundred X better. And again, I think that everything I'm saying is going to happen. It's just like AI is just too good and to not have it happen, but, um, it'll take a, it'll take a time, a while.
00:44:27
Speaker
Yeah, I think confidently in our lifetimes for sure. Yeah, I was actually hanging out with my family last weekend and we were discussing chat GPT and if chat GPT could replace a therapist. And I was with them and I was playing around with like, oh, I'm going to send a message to chat GPT of, oh, I'm struggling with the career thing, help me and
00:44:50
Speaker
It gave a very generic answer, but it doesn't have all the inputs yet. Once it talks to me and knows the history and the context, I think it's going to get a lot better. Totally agree. And by the way, for the record, I think most AI stuff that's out right now is not useful. I think there's a whole useful versus cool thing going on right now, and it's all very cool. Even big companies that I respect, like Runway, which is taking a huge swing. They would say this whole conversation is a joke, and they're going to leapfrog all of it.
00:45:18
Speaker
way into our earlier in our lifetimes and just be able to type, make me a Super Bowl commercial for Coke and it's just going to work. I think that'll take 10, 20 years at least. But yeah, most of the stuff out there, there's just not a lot of people retaining, using it every day for some of the reasons like you experienced with what you just tried.
00:45:36
Speaker
Right. Cool. Well, thank you so much for being on the show. It was really a great conversation. My last question, and I ask every guest this kind of a two parter. I know you haven't really deployed as much media spend personally in the past couple of years, but you have experience with it. The most efficient spend and inefficient spend that you've deployed with media. It is the efficient spend podcast, so I could see why this is.
00:46:06
Speaker
Question so give me give me a few lenses that you have in mind when you say like channels or Frameworks or the way you deploy it or how accounts are set up or what?
00:46:16
Speaker
I would say if you think about just like a campaign or a point in time that you saw something and you were like, wow, this just was super high ROI. I think the Bridget ad was one good example of that, but yeah. And then another time that you obviously just destroyed very inefficient and complete waste of money.
00:46:37
Speaker
Oh my gosh. Yeah. Okay. So on the efficient side, because for so long, we were so laser focused at Ready Set on vertical video ads for Facebook and Instagram. And that was what we did. Let's do this one thing. Well, that my world was limited to that. And so I've got a few other examples that are not worth going into about, yeah, hit him's and hers or DoorDash or other ads that are just absolutely crushed it and clearly are very, very efficient.
00:47:03
Speaker
And I think it's pretty cool. Like you told a marketer 10 years ago, hey, there's going to be this thing where they make this ad for not much money, and it's going to make the company millions of dollars. That's really exciting. Since then, Ready Set's gone a lot more horizontal, full service, media buying and strategy, search, et cetera. So I should have more stories for you in a year or so. Inefficient is when brand marketers try to use Facebook for brand advertising.
00:47:32
Speaker
I'm kind of of two minds about this. Part of me is like, maybe it's a good place to do it if that's your goal. I think what we've seen is the brand folks bomb in and I'm an ex-brand guy and get them and love them. And they're like, no, no, no, no. What is all this native looking stuff? No, no. I don't care that it's TikTok or Facebook. We all need to show this elevated thing, you know, the shiny, the logo, all of that together. And then
00:47:55
Speaker
And I'll tell you, Paul, I have had CMOs now multiple times have seen this movie say, John, I know it's probably not going to perform great, but like it's really poor to us or my CEO or whatever. Let's just do it. Turns out every time we do it.
00:48:09
Speaker
Definitely doesn't perform great. And it turns out people do care that they just spent a million dollars on something that Facebook is saying, you made no money back. It's been very inefficient. And I empathize with them. It's a struggle. Full circle back to our high quality, yes. But when I say brand, you know what I'm talking about, the super shiny, basically what I call mini TV commercials on Facebook. It's just not the right place for that. And I've seen a lot of inefficiencies there.
00:48:37
Speaker
Yeah. You watch some of those eyes and you're like, what is, what's the takeaway here? You're a little bit confused. Um, cool. Thank you, John. This was great. Awesome. Great to see you, Paul.